Level I

Schweser Qbank - basic, intermediate, advanced

Hi,

just wondering, does anyone know what the point of these question difficulty categories is? On the CFA exam will there only be advanced level questions, or basic as well? So what setting characterizes the real test the best, leaving out basic/intermediate ones, or not?

Tx Continue reading

Change of exam center

I have to change my exam center as I will be in US at the time of the exam. I was discussing the process with one of my firends and she said probably there is a fees of 100$ to change the center. Anyways, I have to change it , so I went to the CFA site and in my profile it showed option to change center. I choose NY as I will be in south New Jersey and thinking NY center wil be closest to it. After choosing the new center it just said your center is changed sucessfully withut asking for any fees. I haven’t recieved any email as confirmation though. Continue reading

Net Working Capital & Stretched Payables

Im confused,

A significant increase in days payables above historical levels is most likely associated with:

A)
an increase in net working capital.

B)
an unsustainable increase in reported earnings.

C)
low quality of the cash flow statement.

I said A) Increase in net working capital.

My reasoning was that if days payable increases, that means you are paying at a later date, therefore holding more cash now. Continue reading

convexity effect

Hello all,

Ok my algebra is a little rusty, but is this simply order of operations? Obviously the second equation will get rid of the “-“, and results to a different answer. 

#1: One example of convexity effect when YTM declines by 200 BPS, and is negative;  [97.3 x (-0.02)2] = 3.89%  (this is the correct answer, but they show the original equation to use as the one below…)

vs.

#2: convexity effect = 1/2annual convexity(changeYTM)^2:  1/2 x 97.3 x (-0.02)^2 = .0195 or 1.95%

Continue reading

What if you fail?

What happens if you fail the Level 1 Exam in June?  Does it stay on a record, or prevent you from taking it again in December?  Not trying to belittle the exam, but I’d like to give it a shot in June as I have Masters in Finance already and 6 weeks off to study.   Continue reading

Valuation query

I know this may not directly be related to the topics taught by the CFA.. but I read somewhere ( an IBD training manual frmo a BB) that it is more appropriate to use year specific discount rates  respective to the years as opposed to using one discount rate throughout.

I can understand theoretically why you would use a “2-year zero” for discounting cash flows received in 2nd year etc… but why is it conventional to use a single discount rate throughout?

Cheers Continue reading

Fixed Income, Duration

Could someone please kindly explain the following statement as clearly as possible?

If the investment horizon is shorter than the Macaulay duration, the price impact of a decrease in YTM dominates the loss of reinvestment income and the realized yield will be higher than the YTM at purchase.

Cheers! Continue reading

How important is remembering formulas while studying?

So I know remembering formulas are important for CFA level 1.

But my question is how important is remembering the formulas while you read all 6 chapters on the CFA?

When I first started out, I would copy every formula I saw on a flash card and try to remember each one. However with SO MANY formulas, I figured it took too much time and I just simply glossed over it.

After finishing reading a session, I am able to answer most of the conceptual questions in both Schweser and EOC. Continue reading

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